■ Leo F. Mullin spent nearly 30 years rising through leadership
positions within several different fields, including banking and
transportation, before becoming the chief executive officer of Delta
Airlines in 1997. He turned the company's finances around during
his first three years as CEO; however, Delta had to struggle along with
the rest of the airline industry following the terrorist attacks on the
United States in September 2001. Mullin, who held three degrees from
Harvard University, became embroiled in controversy when company documents
revealed that he and other executives had been paid large sums of money in
the form of cash bonuses and payments to pension plans during a time in
which the company was asking its employees to accept wage cuts. Mullin
stepped down as CEO of Delta at the end of 2003.

Leo F. Mullin.

AP/Wide World Photos

.

EDUCATION AND EARLY CAREER

Leo Mullin grew up in a sound educational environment in Maynard, a small
town in eastern Massachusetts. He was one of eight children born to a high
school principal and a schoolteacher. Mullin remained in his home state to
attend Harvard University, where he studied engineering as an
undergraduate. He completed his bachelor's degree in 1964, followed
by a master's degree in applied physics and applied mathematics in
1965. Mullin remained at Harvard, receiving a master's degree in
business administration from the Harvard Business School in 1967.

Mullin was hired as an associate at McKinsey & Company, a financial
consulting service in Washington, D.C., in 1967 and remained with the
company for nine years. He was promoted
to principal or partner of the firm in 1973 and continued working for
McKinsey until 1976. Mullin had his first experience in the transportation
industry when he became senior vice president for strategic planning at
the Consolidated Rail Corporation (Conrail) in Philadelphia in 1976.

Mullin continued his rise into the ranks of upper management in 1981 when
he was hired as the senior vice president of the First Chicago
Corporation, the tenth largest bank in the United States. He was later
promoted to executive vice president in 1984 and remained in that position
until 1991. Between 1991 and 1993, Mullin served as the chairman of the
American National Bank and Trust Company in Chicago, a subdivision of
First Chicago. His rise through the company culminated in his appointment
as the bank's president and chief operating officer in 1993. In
1995 Mullin transferred to Unicom and its subsidiary, Commonwealth Edison,
as the Chicago company's vice chairman. Mullin joined Unicom at a
time when the utility company had had to adjust to industry deregulation.

AN OUTSIDER CEO

Mullin's next position represented a surprising change for the
company that hired him. Until 1997 Delta Airlines had never hired a chief
executive officer who had not risen through the company's own
ranks. Delta had, however, experienced several crises in the course of the
1990s. During the early part of the decade, the company struggled with a
series of financial problems caused by expensive expansion projects. The
problems in turn forced the CEO at that time, Ron Allen, to make deep
cutbacks. Although Delta had made some financial gains under
Allen's direction, its internal morale and customer service had
suffered. After several clashes with the company's board, Allen was
forced out as CEO.

Delta looked outside its own management when it hired Mullin after a
three-month search. Although Mullin had had no experience in managing
airlines when he took over as CEO in August 1997, he did not regard his
inexperience as a disadvantage. He referred to himself at the time as a
"student of companies" (
Atlanta Journal-Constitution
, August 16, 1997). Mullin promised to restore a balance between improving
Delta's financial situation and dealing with other important
factors, including customer service and relations with employees.

Mullin gained the respect of observers in his first few months with Delta
as a result of his open and earnest leadership style. Delta's stock
prices climbed during its first year under Mullin's direction.
Delta announced its first billion-dollar profit in 1998, and the
company's stock price rose to an all-time high of $143 per share.
Customer service also improved during Mullin's first year as CEO.

Mullin added the title of chairman of the board to his resume in 1999, but
some long-standing problems resurfaced. The company began negotiations
with its pilots' union in September 1999. During a meeting in
October, the pilots raised a number of concerns regarding the
company's dealings with its personnel. Although Delta's
pilots were paid the highest salaries in the industry, they felt
considerable animosity toward the company's management as a result
of deep cutbacks experienced during the early 1990s.

A LEADER IN CRISIS

Delta's profitable run under Mullin ended in 2000 and 2001, as
labor costs and fuel prices both escalated. Delta reached an agreement
with the pilots' union in June 2001 that provided for a
24–39-percent increase in the pilots' pay. The contract was
expected to cost the company $2.5 billion. Delta's profits
continued to slide.

The next crisis occurred less than three months later, when the terrorist
attacks on the United States on September 11, 2001 crippled the airline
industry. All civilian airplanes were grounded for several days after the
attack. The interruption in service cost the industry an estimated $120
million per day. Although none of the planes that were hijacked by the
terrorists belonged to Delta, the disaster affected all the major
airlines.

Within weeks of the terrorist attacks, however, Mullin emerged as an
industry spokesperson. He addressed congressional committees on several
occasions, requesting federal aid for the airlines and asking Congress to
approve mergers between airlines. Thanks to Mullin—who was
considered the appropriate industry executive to speak because he
"has the ability to communicate that some others
don't"—Congress agreed to rescue the ailing airlines
(
Los Angeles Times
, September 21, 2001).

CONTROVERSY OVER SALARY

Delta shared the ongoing financial problems that affected all the major
carriers following the September 11 attacks. The company sought
concessions from the pilots' union, asking the pilots to accept
significant pay cuts. The pilots stood firm. As many as 16,000 Delta
employees were laid off between the early part of 2001 and the end of
2003, resulting in a sharp drop in employee morale. The first wave of
staff reductions were the result of voluntary retirements and buyouts that
took place after the company announced potential layoffs. Flight
attendants were the group most heavily affected in 2002 and early 2003,
although the cuts affected just about every job category in the company.

Although Mullin retained his position as an industry leader through 2002,
his reputation was tarnished when reports revealed that Delta had paid as
much as $43 million to its executives in the form of cash bonuses and
payments to executive pension funds. These pension funds could not be
touched in the event that the airline was forced to declare bankruptcy.

Delta's performance rating declined in 2003 along with employee
morale and customer satisfaction. Mullin was unable to win concessions
from the pilots' union even though Delta tried to cut the
pilots' compensation by as much as 31 percent. Amid the turmoil,
Mullin abruptly announced his retirement as CEO of Delta in November 2003.
He remained as the company's chairman for part of 2004. Although
Mullin claimed that the timing of his retirement came at a "perfect
break point," analysts assumed that the move was necessary because
the pilots were unlikely to agree to wage cuts as long as Mullin remained
at the head of the company (
Washington Post
, November 25, 2003).

Apart from Mullin's duties at Delta, he was widely known for his
involvement with civic and business organizations, including the Museum of
Natural History in Chicago, the Chicago Chamber of Commerce, and the
Chicago Urban League.

See also
entries on Commonwealth Edison, Consolidated Rail Corporation, Delta Air
Lines, Inc., and First Chicago Corporation in
International Directory of Company Histories
.